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Open AccessReview

The Potential and Uptake of Remote Sensing in Insurance: A Review

World Agroforestry Center (ICRAF), Eastern and Southern African Region, P.O. Box 30677-00100 Nairobi, Kenya
Faculty of Geo-Information Science and Earth Observation (ITC), University of Twente, P.O. Box 217 7500 AE Enschede, The Netherlands
International Livestock Research Institute (ILRI), P.O. Box 30709-00100 Nairobi, Kenya
Institute of Surveying, Remote Sensing & Land Information (IVFL), University of Natural Resources and Life Sciences (BOKU), Peter Jordanstrasse 82, 1190 Vienna, Austria
World Agroforestry Center (ICRAF), Eastern and Southern African Region, P.O. Box 5689 Addis Ababa, Ethiopia
International Center for Agricultural Research in Dry Areas (ICARDA), P.O. Box 950764 Amman, Jordan
World Agroforestry Center (ICRAF), P.O. Box 30677-00100 Nairobi, Kenya
Charles H. Dyson School of Applied Economics and Management, Cornell University, Ithaca, NY 14853-7801, USA
Author to whom correspondence should be addressed.
Remote Sens. 2014, 6(11), 10888-10912;
Received: 25 May 2014 / Revised: 28 October 2014 / Accepted: 28 October 2014 / Published: 7 November 2014
(This article belongs to the Special Issue Remote Sensing in Food Production and Food Security)
Global insurance markets are vast and diverse, and may offer many opportunities for remote sensing. To date, however, few operational applications of remote sensing for insurance exist. Papers claiming potential application of remote sensing typically stress the technical possibilities, without considering its contribution to customer value for the insured or to the profitability of the insurance industry. Based on a systematic search of available literature, this review investigates the potential and actual support of remote sensing to the insurance industry. The review reveals that research on remote sensing in classical claim-based insurance described in the literature revolve around crop damage and flood and fire risk assessment. Surprisingly, the use of remote sensing in claim-based insurance appears to be instigated by government rather than the insurance industry. In contrast, insurance companies are offering various index insurance products that are based on remote sensing. For example, remotely sensed index insurance for rangelands and livestock are operational, while various applications in crop index insurance are being considered or under development. The paper discusses these differences and concludes that there is particular scope for application of remote sensing by the insurance industry in index insurance because (1) indices can be constructed that correlate well with what is insured; (2) these indices can be delivered at low cost; and (3) it opens up new markets that are not served by claim-based insurance. The paper finally suggests that limited adoption of remote sensing in insurance results from a lack of mutual understanding and calls for greater cooperation between the insurance industry and the remote sensing community. View Full-Text
Keywords: insurance; remote sensing; index insurance; agriculture; flood risk management insurance; remote sensing; index insurance; agriculture; flood risk management
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De Leeuw, J.; Vrieling, A.; Shee, A.; Atzberger, C.; Hadgu, K.M.; Biradar, C.M.; Keah, H.; Turvey, C. The Potential and Uptake of Remote Sensing in Insurance: A Review. Remote Sens. 2014, 6, 10888-10912.

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